Opinion: How the pound store is moving online

Many big retailers have been forced to close or restructure in recent years as retail transforms.

In the last week there has been the administration of House of Fraser, while Poundworld has also closed its doors – though a last-minute deal means some stores look likely to be sold.

The collapse of Poundworld, which employed more than 5,000 people in 335 stores, is one more sign of distress on Britain’s ailing high streets.

“We are living in a world of instant gratification, in which consumers demand both value and great service”

But if a business such as Poundworld couldn’t survive on the high street then who can? Consumer behaviour is shifting towards online and the convenience that brings.

We are living in a world of instant gratification, in which consumers demand both value and great service.

Retailers increasingly have to ensure they stay convenient, to protect and build their businesses. That is now easy to execute in ecommerce businesses with the implementation of cookies, account history, algorithms and delivery options.

Additional factors such as the costs of running a shop, the fact that customers have less time to go shopping and rising rents and rates have also driven the closure of high street stores.

Most lease rents increase every 3-5 years, knocking small independent retailers off the high street. Wages and pensions have increased, also increasing the costs to run a business. Many independent retailers have closed down because they have no buying power to compete. Brexit and higher product cost inflation has led to squeezed margins, so businesses have to buy product wisely.

European expansion

Poundshop.com doesn’t have any high street stores because I believe customers already know our products, most of which are essential items that people need weekly.

The average spend in a high-street pound store is around £5, but online the average spend increases to £40.

Customers want to feel valued, so we use some techniques that safeguard returning shoppers by offering bulk discount options and loyalty points, encouraging further sales.

Poundshop.com operates from a 20,000 sq ft warehouse in the Midlands and expects revenues to exceed £20m within a few years.

“Ecommerce is a truly competitive landscape and the key is to choose the right technology”

There are still many towns that do not have a pound shop, which increases the opportunity for us as an ecommerce business. We are seeing customers from as far away as Spain, Germany, Netherlands and France visiting our website on a weekly basis. We see expansion into Europe and beyond as having huge potential.

Additionally, as a result of keeping our expenses down with just one warehouse, we can continue offering value for money products.

Ecommerce is a truly competitive landscape and the key is to choose the right technology stack to drive loyalty and relevance. If we do that at Poundshop.com, our customers will come back time and time again and tell their friends and family.

As a result of the dying high street brands, I’m convinced that the future of retail is ecommerce.